NZD/USD Faces Test of 50-Day SMA Ahead of Fed Rate Decision
NZD/USD stages a five day rally after clearing the opening range for July, and the exchange rate appears to be on track to test the 50-Day SMA (0.6314) following the failed to clear the May 2020 low (0.5921).
However, NZD/USD may largely mirror the price action from last month if the advance from the yearly low (0.6061) stalls ahead of the moving average, and the exchange rate may consolidate ahead of the Federal Reserve interest rate decision on July 27 as it struggles to extend the series of higher highs and lows from earlier this week.
NZD/USD Rate Daily Chart
Source: Trading View
NZD/USD appears to have reversed course following the failed attempt to test the May 2020 low (0.5921), with a close above the 0.6230 (61.8% retracement) to 0.6260 (38.2% expansion) region raising the scope for a run at the 50-Day SMA (0.6314).
Next area of interest comes in around 0.6350 (100% expansion), but NZD/USD may mirror the price action from last month if it fails to push above the moving average.
In turn, the advance from the yearly low (0.6061) may turn out to be a correction in the broader trend, and failure to close above the 0.6230 (61.8% retracement) to 0.6260 (38.2% expansion) region may push NZD/USD back towards 0.6170 (50% expansion), with the next area of interest coming in around 0.6070 (61.8% expansion) 0.6070 (61.8% expansion).
--- Written by David Song, Currency Strategist
Follow me on Twitter at @DavidJSong
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.